Market Overview

Tickers

Articles

Keywords

Apple or Intel Will Lead TV to the Next Generation

There is a strong belief that the future of television will fall into the hands of Apple (NASDAQ: AAPL) and/or Intel (NASDAQ: INTC).

Rich Tullo, Director of Research at Albert Fried and Company, is confident in the technologies and services that both firms are developing. He feels that one or both of those companies will lead the TV revolution.

"Apple or Intel will subsidize it to a degree, but they want you to store your s*** in their lockbox," Tullo told Benzinga. "They're gonna charge you rent for your storage and that, to me, like every piece of content, is going to be stored at a big server somewhere in your section of it and you're paying them money to keep the content that you bought or are renting. I think that's the model that will provide incremental revenue [in case] subscribers are lower or [they want] to go without the advertising, which is eroding their linear business."

This strategy is part of Apple and Intel's plan to acquire customers and prevent them from switching to competing products or services.

"Once you're in it, they've got you," said Tullo. "You're captive because you lose it if you go from Intel to Apple [or vice versa]. It's not portable."

Tullo then questioned why users would be willing to adopt this format.

"Because I don't want to be lugging around 10 books with me to go to work in the morning if I'm doing different things," he said, answering his own question. "It's just gonna be the way. It's gonna have certain benefits and it's gonna have certain negative aspects to it."

Tullo does not expect that Apple or Intel will offer the à la carte cable platform that has been rumored for months. Instead, he expects that these tech giants will offer one big package for $150 to $200 (which will include every channel, unlimited on-demand content, unlimited streaming content, etc.), plus a smaller package with low-cost add-ons.

"[They will] have this plan that gives you basic television -- it's linear," Tullo explained. "You don't get over-the-top [add-ons]. You're paying more for that. And you don't get to watch [shows on demand] for free."

For that privilege, users will pay an additional $0.99 to $1.99 per month per network or per show, Tullo estimates.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ